ADB offers Philippines up to $1.75B in financial support as Iran war hits economy
The Asian Development Bank (ADB) has provided the Philippine government with up to $1.75 billion in additional financial support to help it manage the economic impact of the Middle East conflict.
ADB President Masato Kanda met with President Ferdinand R. Marcos, Jr. at the Malacañan Palace and said the international lender is ready to provide more money as the country faces the fallout from the war, a statement said on Friday.
“The Philippines is ADB’s home, and we see the difficulties this crisis is bringing to families, workers and businesses in the Philippines,” said Mr. Kanda. “ADB will work quickly to support the government to protect vulnerable communities, manage financial stress, and strengthen economic stability.”
Additional support of up to $1.75 billion will come in the form of policy-based and countercyclical loans, as well as trade finance if needed.
This is on top of some $2 billion in policy-based loans that the Philippines is preparing this year.
ADB said this would help the government provide aid to vulnerable Filipinos and reduce the impact of war-driven oil supply shocks, which have already pushed up inflation and slowed economic growth.
“The Philippines has been hit hard by the conflicts in the Middle East because of its heavy reliance on oil, fertilizers and other global goods,” the newspaper said.
“ADB is also working with government agencies to protect vulnerable populations and strengthen longevity. This includes support to the Ministry of Agriculture on domestic fertilizer security, assistance to the Ministry of Social Affairs and Community Development on social protection, and support for electricity security, clean energy, energy efficiency, and investment in mass transportation to reduce exposure to fuel prices.”
The Philippines received $6.81 billion in loans, grants, and co-financing from ADB last year.
The first attack by the United States and Israel on Iran on Feb. 28 effectively closed the Strait of Hormuz which usually handles about one fifth of the world’s oil exports. This led to global crude prices jumping to over $100 a barrel from just $60-$70 before the conflict.
This has translated into much higher tap prices for the Philippines, which imports 90% of its oil from the Middle East. The government in March declared a national power emergency due to the crisis.
The Philippines is also a heavy exporter of food, making it vulnerable to global commodity price shocks.
In April, inflation rose to 7.2% in April from 4.1% last month, the fastest since March 2023, as the crisis pushed up the prices of food and services. This is higher than the bank’s target of 2%-4% per year.
Meanwhile, gross domestic product growth fell to a new post-pandemic low of 2.8 percent in the first quarter as the emergence of a corruption scandal and rising oil prices weighed on the economy.
ADB expects the Philippine economy to grow by 4.4% this year, below the government’s target of 5%-6%, according to its Asian Development Outlook April 2026 report. – Bettina V. Roc
